Applications for the 2022 dairy margin coverage program are open. Micheal Clements shares more on what dairy farmers can expect from the program in the New Year.
Clement: The American Farm Bureau Federation reminds dairy farmers that they can enroll in the 2022 Dairy Margin Coverage program now. Farm Bureau associate economist Danny Munch says the program offers risk protection for dairy farmers when milk prices are low and feed costs are high.
Crunch: This is a voluntary program administered through the FSA that actually makes payments to farmers based on the particular coverage levels they choose. So from 2022 we have the additional milk margin coverage, which is new, and which will actually allow farmers to update their production history from what was the highest commercialization between 2011 and 2013, 75 percent of the difference between 2011, 2013 and 2019.
Clement: The Farm Service Agency also adjusted the underlying calculation for alfalfa, used in calculating the average cost of feed.
Crunch: It used to be 50 percent premium alfalfa, and now it’s 100 percent premium alfalfa to better reflect dairy spending, and this adjustment will really allow farmers to take advantage of higher payment levels. if the change in the price of alfalfa is related to a higher level of coverage they have chosen.
Clement: Munch says the most recent USDA reported margin for October was $ 8.77 per cwt.
Crunch: This is in fact the biggest margin since November 2020. So a small improvement in the dairy markets, partly because of a modest drop in the prices of corn and soybean meal, but also because of a small supply restriction in the milk market. Dairy margin coverage really helps protect farmers against massive changes in feed costs which, with all the supply disruptions going on right now, is a very good option for dairy farmers. to protect themselves in the future.
Clement: Learn more on the Intel Market page on fb.org. Micheal Clements, Washington.